Thank you Paul Krugman! Though your thinking is completely backwards you did manage to clarify a point I've been trying to make for a while now so for that, I owe you one. Here's the quote I'm referring to...

In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.”

I'm someone who has put a lot of time into the study of morality. I try not to let that bleed into this blog because I believe technologists, in most cases, should be amoral. If you start holding back science and technology because of what you feel is moral you lose out on a lot of great discoveries. Its better to discover how to do something and then decide whether to use it.

But see, THAT is the point. Once something CAN be done it is our duty as a society to decide whether it SHOULD be done. Technology is amoral which is why people must be all the more conscious of morality when using it.

File sharing, against the wishes of the people who created the media being shared, is stealing. Simple as that. Someone put a lot of effort into creating something and if you take possession of that thing without compensating the creator you are stealing from them. Justify all you want about non-existent media cost or the (flawed) economic theory of 0 production. In the end, the fact that you feel the need to justify betrays you.

I don't feel the need to justify paying for something honestly.

But here's the thing: People could always steal. Technology has, in the grand scheme of things, just recently made it harder to steal with things like motion detectors and alarm systems. Before that people simply locked their goods behind a door and trusted that their neighbors would not break in. So nothing has really changed here.

It is no easier for a file trader to download a song than it would be for someone in the 1800s to jump over a fence and steal a chicken (or at least not by that much).

That is the flaw in Ms. Dyson's theory. She is essentially saying that, because everyone can now steal easily, media creators need to accept their goods will be stolen and just give them away. But things have always been easy to steal and, for the most part, people still choose to pay honestly.

The number of people who use file trading to get their music is still miniscule in comparison to those who pay for it.

That, by the way, is why Mr. Krugman's extension of Ms Dyson's theory is wrong. The instinct not to steal is what has stopped this from being an epidemic. But it is important to realize the logic behind that. We as people can not allow our society to descend to a place where stealing becomes accepted just because it is easy. It is each person's duty to remember why taking from someone is wrong and to prevent ourselves from doing it no matter how easy it gets. Only then can we all be secure in our belongings, both physical and digital.

File Trading Caveat: Just to put it out there, I'm not against business models that give media away for free. If you can make the money you want giving away your book/music/video/software/whatever I say more power to you. My issue is with forcing people to give their music away for free.

It looks like Paul Krugman is the latest economist to join the growing group of folks who recognize the impact of infinite goods on business models -- and how it's not a bad thing, just an inevitable shift in the market.

A couple things to consider here. First, Mr. Krugman wasn't giving an opinion as an economist nor was he necessarily referring to the theory they espouse.

Second, Techdirt's supposed economic theory, which I alluded to above, doesn't hold water. Their basic premise is to take the real economic theory that the cost of goods will fall when the cost of producing those goods goes down and extend it to say that when the cost of production equals 0 so too will the cost of the goods equal 0.

This is flawed in too many ways to count but the two big flaws are that (a) cost to produce in an economic sense includes labor to create and cost to distribute meaning the production costs aren't 0 and (b) even if they were 0 that wouldn't mean anything because 0 holds a special significance in mathematics (which is why, for example, 0 is the only number you can't divide by).

I point this out because it is a hallmark of the "free content" movement. Rely on theory as if it somehow trumps reality.

Second Addendum: Mike Masnick of Techdirt checks in below and asks that I retract the use of the word dishonest above. I think the word is absolutely accurate in the context so I'm not going to retract it. But I encourage anyone reading this to check out his comment below so you can make your own judgement.

Just a quick suggestion: before trashing a theory, at least try to understand what the theory says. Also, I take personal offense to you calling me dishonest, when you prove no dishonest statement. Funny that someone who goes on and on about morals then accuses someone else of being dishonest without any proof.

Krugman is a famous economist and his column in the Times is supposed to be from the perspective of an economist. Second, there is nothing incorrect in saying that he's an economist (true!) and that he appears to be recognizing how these things are changing business models (also true!).

As for the theory, and it not holding water, you responded to a straw man. Please learn the difference between fixed costs and marginal costs. You try to dispute the concept of price getting driven to marginal cost (a fully accepted economic concept) by referring to the fixed costs.

Second, you say that we focus on "theory trumping reality" when we do no such thing. We show theory to explain why things are happening, but we also have backed that up with historical evidence as well as contemporary evidence to show it working in practice.

Finally, as for your complaint about zero, and how it "wouldn't mean anything" that is impossible to respond to because you haven't said anything, other than suggesting that zero is some sort of magical incantation that means you can't do anything once you've mentioned it. As I have written about and spoken about, the history of the number zero is fascinating in how many people seem to be scared off by the very concept. To suggest I don't understand zero would be wrong. I have studied, written and spoken about "zero" for quite some time.

As for the rest of your post, you seem to be suggesting that people proposing this model are trying to "force" content creators of giving their content away. In my case, that has never been true. I am merely trying to explain to them how they can be better off if they choose to do so -- while also pointing out that if they choose not to do so, and everyone else does, they'll be in trouble.

No one is saying, as you falsely imply, that "because content can be stolen, it should be given away." As I have made abundantly clear, I am speaking from the perspective of the content creator and how they can be better off by embracing these things -- not as a defense of infringement (which, while NOT "stealing" is still very much against the law).

You have built a strawman, and in knocking down that strawman of a theory that I have not supported, suggested false things about me. That seems a lot more "dishonest" than supporting my points with theory, historical evidence, research and contemporary evidence.

I would ask that you correct your post, specifically the allegations about my position.

I'll be the first to admit that I thought twice about using the word "dishonest" but it’s absolutely true in the context of things which is why I went ahead with it. Your defense that he writes solely as an economist for the Times holds absolutely no water and in fact is contradicted by his one line biography given by the times which says he writes about "Politics and economics of inequality in America and other topics."

For the record, if he were giving his opinion as an economist on the economic theory of free media he would quote facts, figures and present some kind of data overall.

The truth is, from everything I’ve seen your website basically runs a campaign of dishonesty when it comes to this topic. You base your flawed theories on a small fraction of the population and blow it up to represent the population as a whole. Then you attach those flawed economic theories to the phenomenon you created. To actually address the reality you would have to have actual numbers and facts to back your assertions. You’d have to actually address contrary opinions and acknowledge the fact that not a single person in the field endorses you theories. None of which you do.

I mean, it isn't that hard to get research done. I commented on a thread on Mathew Ingram's site a while back and you suggested an e-book By Michele Boldrin and David Levine. I read it and thought it was nonsense but wanted to be sure. So I emailed a couple of local economics professors and asked them if they’d be willing to do some side work by reading the ebook over and giving me their opinion.

So I, as one person, managed to get two economics professors to read over this stuff by spending an hour of my time and a little under $1000 of my money why can't you hunt down economics professors to validate your theories?

I mean, one of your responses to me was "learn the difference between fixed costs and marginal costs" so I have to ask, if what you espouse is that fundamental why economists aren't lining up to validate you? (The irony here is that it’s your theory that really disregards the difference between fixed and marginal costs but I digress)

Finally, this (quoted from you)…

As for the rest of your post, you seem to be suggesting that people proposing this model are trying to "force" content creators of giving their content away. In my case, that has never been true. I am merely trying to explain to them how they can be better off if they choose to do so -- while also pointing out that if they choose not to do so, and everyone else does, they'll be in trouble.

Is ridiculous. When you say something is inevitable what you are saying is that it is going to happen whether the content providers like it or not. So unless you know, for a fact, that what you say is inevitable is actually inevitable what you are trying to do is force people into doing what you want them to do by telling them they'll have no other choice. What you are trying to do is use scare-mongering to force the music industry to go along with your backwards theories.

Beyond that lets not overlook your actions. If you are using file trading to obtain music that was not given away by the artist YOU ARE FORCING THEM to subscribe to your theories because they can't stop you.

In the end, You have no serious economic backing for this theory. There are no economists who have actually stood up and validated your theories. The entirety of this movement boils down to a few webmasters with shaky understandings of macroeconomics.
That said, I put forth the same challenge to you as I do to anyone I have this discussion with. Prove me wrong. If you can point me to something written by an economist that discusses these theories and validates your opinion I promise you I'll read it. I read the ebook you suggested before (which btw was all one person's opinion and completely absent of actual facts or research to back up those conclusions).

Tom, having someone disagree with you doesn't mean they're dishonest. To accuse anyone who disagrees with you of being dishonest is... well... weak.

You still did not explain how it's dishonest to call Krugman an economist. He is. Are you saying he is not?

"You base your flawed theories on a small fraction of the population and blow it up to represent the population as a whole."

No. I explain basic economic theory, and then use examples and historical evidence and peer-reviewed research to support it. I'm not sure where you got the idea that I use a small fraction of the population and extrapolate. I have done no such thing. But when I explain theories and show the economic history and research, people ask for examples -- so I also show some examples to show how it works. I'm not using those examples to prove the larger theory -- which is already quite well supported.

"So I, as one person, managed to get two economics professors to read over this stuff by spending an hour of my time and a little under $1000 of my money why can't you hunt down economics professors to validate your theories? I mean, one of your responses to me was "learn the difference between fixed costs and marginal costs" so I have to ask, if what you espouse is that fundamental why economists aren't lining up to validate you?"

Um. Did you miss the part where Levine and Boldrin are both well-respected top-flight economists. Or that a bunch of Nobel Prize winning economists (including the most recent one) have lined up behind their book, provided supporting quotes for the book and are helping to promote it -- which you call "nonsense"? I would say that many economists *are* lining up to support it.

Did you miss those things? Or were you just "dishonest"?

In the meantime, how is it "scare mongering" and a "backwards theory" if there is a ton of evidence to support the theory, and the end result of supporting the theory is a better business model? What kind of "scare mongering" says "hey, look, here's a better way to make money." Yeah, I can see how that has people shaking in their boots.

"Beyond that lets not overlook your actions. If you are using file trading to obtain music that was not given away by the artist YOU ARE FORCING THEM to subscribe to your theories because they can't stop you. "

Um. That would be true if (a) I used file sharing or (b) I advocated people use file sharing systems. I do neither. I do not use any myself and I have never supported anyone doing so. What I have suggested, is that artists look for ways to embrace them, but I do not support anyone using a file sharing system for unauthorized works.

In fact, I'd say it's rather "dishonest" of you to suggest otherwise.

Again, please retract your false statement.

"In the end, You have no serious economic backing for this theory. There are no economists who have actually stood up and validated your theories."

Other than, you know, the ones mentioned earlier.

"If you can point me to something written by an economist that discusses these theories and validates your opinion I promise you I'll read it. I read the ebook you suggested before (which btw was all one person's opinion and completely absent of actual facts or research to back up those conclusions)."

Hmm. One person's opinion? Then you read the wrong book. Did you miss all the research they quoted? Did you miss the fact that it was written by two (not one) prominent, well-respected economists? And, we've already established the fact that you missed the three Nobel prize winning economists who have endorsed the book.

First, let me say that me thinking you used file sharing was a leap on my part and I apologize for it. I think it was an understandable one given your advocacy but it was an assumption none the less. I do think it’s a stretch to say you haven’t encouraged file piracy though. Your coverage of Oink and Pirate Bay both took the side of the pirates (and those are just the specific examples I can remember)

On the Economic theory, you seem to have a problem distinguishing between complementary praise and actual endorsing of a theory. I think Karl Marx was a great philosopher but I don’t endorse his theories or think they work in practice. That doesn’t mean I don’t admire the work he put into them.

So when you take the quote from Eric Maskin who says “Their arguments will generate controversy but deserve serious examination” you see that he isn’t endorsing their theories at all.

In fact, that is what a friend says when he’s been asked to give a quote to a book and DOESN’T want to endorse the ideas therein. It is complementary while being completely non-committal. The other quotes are essentially the same, they call the book “important” or “needed” or a bunch of other seemingly important but ultimately meaningless words and then stop short of in any way endorsing the theories presented.

The reason for that (I suspect) and the reason that I and everyone I’ve spoken to think the book is essentially rubbish is because it’s largely an opinion piece. They compare, for example, the software industry pre-1981 to the software industry of today which is nothing short of ridiculous. They claim that the current law, if it existed back then, would have destroyed the software industry of today yet 27 years later the software industry is still going strong despite patents. The book goes on and on drawing conclusions that aren’t at all supported by facts (not because the facts are inaccurate because they simply aren’t quoted at all). The majority of the footnotes are for quotes.

Finally, on the “people who disagree with you aren’t dishonest” point, I don’t dispute that. But people who claim someone has “recognized the impact” of a certain business model and realized “its not a bad thing” are being dishonest when quoting an article that really doesn’t make a value judgment at all and in fact says “the strategy of giving intellectual property away so that people will buy your paraphernalia won’t work equally well for everything.”

I give up. You claimed no economists would stand behind the book. You ignore that the authors are well respected economists and got 3 Nobel Prize winning economists to give quotes. You realize these folks don't just give quotes for any book, and if they felt that it was some terrible book they didn't agree with they would never have agreed to put their name on it?

Secondly, when it comes to the book itself, it was written not as an academic treatise, but as a book for everyday readers. Yet the book *does* cite numerous studies and academic research, which you totally ignore. Go dig into the research a little, before you condemn it. The deeper you get, the more supporting facts you'll find. But, why do that when you can brush it all off as "dishonest" and "nonsense."

I like how you also claim that the other Nobel quotes are similar, but don't quote them. Perhaps because they're not similar, but are pretty strong endorsements of the concepts in the book:

"The case made by Boldrin and Levine against giving excessive monopoly rights to intellectual property is a convincing one. Monopoly in intellectual property impedes the development of useful knowledge. I think they make the case that granting these monopoly rights slows innovation." -- Edward C. Prescott, Nobel Laureate, University of Minnesota

"Boldrin and Levine present a powerful argument that intellectual property rights as they have evolved are detrimental to efficient economic organization." – Douglass C. North, Nobel Laureate, Washington University in St. Louis

That's a lot stronger than you make it out to be.

Anyway, even outside of Levine and Boldrin, we're starting to see more economists researching in this area, so there will be plenty more where that came from. And, again, despite your claim that no economists support these theories, I was taught by some wonderful economics professors who turned me on to these ideas in the first place, long before I heard of Levine and Boldrin.

Finally, as for the Krugman piece, I don't see how you can read that and suggest that he did think it was "a bad thing." The bit you quote doesn't make what I said false. Just because it won't work equally for all people is not him saying that it's bad.

You are really grasping at straws here in an effort to boost your initial statement.

I see no reason to continue this discussion if you cannot admit that your charge of dishonest was, in itself, incorrect. I'm sure you believed it to be true, so I won't say that you are dishonest (I tried to do so earlier to show how silly your "dishonest" charge was, but clearly that went over your head). Is it so hard for you to believe that there is an awful lot of evidence backing up my position, that I have read through an awful lot of it, and that I am not coming from a position of "dishonesty," but an informed position based on all of that research? To support my position with evidence is not "dishonest." If it is *wrong* then you are free to present counter evidence.

To date, you have not done so. You have tried to dismiss ideas as being "nonsense" but failed to point out a single incorrect thing. I'm sorry, but that up against the stacks and stacks of research is not particularly compelling.

So, with that, I'm leaving this discussion unless you provide something credible to dispute these ideas and step back from calling an honest position dishonest.

Ok, one final comment, since I can't let a false (not "dishonest") comment stand:

You wrote: "Your coverage of Oink and Pirate Bay both took the side of the pirates (and those are just the specific examples I can remember)."

This is not so. You are again making false assumptions. The positions I have taken are that (a) it is not proper to blame a platform for the actions of its users and (2) there is little value to the industry in shutting these sites down, as new ones pop up almost immediately that are even harder to track down.

In neither case did I make any statements siding with those who participate in those sites.

You need to learn to separate my position, which is trying to help content creators and the companies that finance them with navigating the new world, and "siding with them."

I recognize it's a nuanced argument, but not an impossible one to grasp, is it?

I do think we are at the point where we have to just agree to disagree but I was wondering, if you are still monitoring this thread, is there a post of yours that you would consider "definitive" as far as explaining your position. I looked through techdirt for about a half an hour tonight and couldn't find one that fit the bill.

I still don't agree with you but I really hate the idea of posting just one side of the story and would like to link to a post that explains your position in its entirety if you could point me to it.

About Me

Not really relevant right now. This blog is on hiatus. I really haven't decided if it is an indefinite hiatus yet

For the record if you've tried to e-mail me over the last 4 to 6 months I didn't mean to ignore you. The e-mail forwarding isn't working and I didn't realize that until months worth of e-mails had been deleted on forward. The tom@tomstechblog.com address still won't forward to the postmaster account and I don't know why because it's provided by the webhost. But if you're one of my old blog pen pals I would always welcome an e-mail from you at the postmaster@tomstechblog.com address